Marylebone VS their elite London rivals Belgravia – how far is the gap between property values as well as rental prices between the two areas, and what sort of capital growth rates have we witnessed over the last year?

Date Published 08 August 2016

Lately, as a result of Marylebone`s continued success in the property market, growing from strength to strength – especially in the last couple of years, a higher volume of people have begun placing Marylebone in the same breath as some of London`s elite neighbourhoods. One such example is during a conversation with a highly successful landlady - who owns a string of properties in Belgravia, she informed me of her expansion plans and how she is debating whether to enter the Marylebone perimeter. Her overriding goal is to enlarge her existing stock of properties and increase her yearly rental income, but retain the high esteem that her residences usually possess. She was well aware of Marylebone growing esteem and how for some time now it has narrowed the gap with Belgravia, where sales in the £10 million plus bracket have become much more prominent - where it was traditionally quite scarce; this is mainly due to the expanding list of luxury developments, expressing that the area has stepped up a huge gear. She proceeded to ask me whether the investment prospects of Marylebone lived up to its steadily growing reputation and if it was worth relocating her investment interests here. I replied that Marylebone would offer a much more value for money option, whilst keeping this luxurious London atmosphere, and whereas Belgravia has utilized much of its growth potential with property values being halted and in some cases decreasing of late, Marylebone has a lot more potential and has yet to reach its true pinnacle. So to briefly expand upon these two areas, starting with Belgravia, noted for its notoriously expensive residential properties and being one of the wealthiest districts in not only London, but also on an international level, much of the perimeter is referred to as the Grosvenor Estate, which remains in the ownership of the Duke of Westminster`s Grosvenor Group. This world renown district is situated mainly to the South-west of Buckingham Palace, with Grosvenor Place to the East, Pimlico Road to the South, Sloane Street to the West, and we are led to Knightsbridge to the North. Belgravia is characterized and forms an identity through its grand terraces of white stucco houses, which are focused predominantly on Belgrave Square and Eaton Square; it has traditionally been one of London`s most fashionable residential areas, and on the whole it has remained in this esteem ever since. Next up for Marylebone - which by now we will know much more about, this area although holding more humble beginnings than Belgravia, it nonetheless has always been well-regarded as the traditional home of London`s best medical services. This high reputation has been carried on with the neighbourhood`s extremely admirable hospital district, which includes Harley Street as well as a number of excellent hospitals such as: University College Hospital along with King Edward VII`S Hospital. In addition, whilst many of London`s hotspots are showered with tourists and sight-seekers, Marylebone retains the feel of a true neighbourhood with a unique character, which is still a short step from the nearby tourist action. The area is surrounded with beautiful architecture, encompasses some very interesting attractions such as: `The Wallace Collection`, `Madame Tussaud`s` as well as `The Sherlock Holmes Museum`; there are also some excellent restaurants, charming pubs, lovely shops, and a short walk will take you to the sublime Regent`s Park. So returning to our objective, I will be comparing the investment prospects of these two areas - concentrating on 2 and 3 bedroom properties, which will include an analysis of the average property values and the rental expectations for residences in both neighbourhoods. Furthermore, I will be outlining the predicted rental yields that properties in each area demonstrate, as well as the typical capital growth and value changes that have taken place over the last year, from August 2015 to the same month in our present year.
Property investment in Marylebone:

George Street (W1H):

2 Bedroom Properties: Average Property Value: £1,658,233 - Average Rental Value: £4,200 (pcm) – Predicted Rental Yield = 3.03% - Typical Capital Growth and Value Changes over the last year (August 2015 – 2016) = £164,169 (9.9%)
3 Bedroom Properties: Average Property Value: £2,271,275 - Average Rental Value: £5,700 (pcm) – Predicted Rental Yield = 3.01% - Typical Capital Growth and Value Changes over the last year (August 2015 – 2016) = £224,861 (9.9%)

Shouldham Street (W1H):

2 Bedroom Properties: Average Property Value: £1,715,114 - Average Rental Value: £4,850 (pcm) – Predicted Rental Yield = 3.39% - Typical Capital Growth and Value Changes over the last year (August 2015 – 2016) = £169,899 (9.9%)
3 Bedroom Properties: Average Property Value: £2,375,300 - Average Rental Value: £6,100 (pcm) – Predicted Rental Yield = 3.08% - Typical Capital Growth and Value Changes over the last year (August 2015 – 2016) = £235,158 (9.9%)

Gloucester Place (W1U):

2 Bedroom Properties: Average Property Value: £1,728,433 - Average Rental Value: £4,400 (pcm) – Predicted Rental Yield = 3.05% - Typical Capital Growth and Value Changes over the last year (August 2015 – 2016) = £171,127 (9.9%)
3 Bedroom Properties: Average Property Value: £2,406,200 - Average Rental Value: £6,200 (pcm) – Predicted Rental Yield = 3.09% - Typical Capital Growth and Value Changes over the last year (August 2015 – 2016) = £238,223 (9.9%)

Property investment in Belgravia:

Elizabeth Street (SW1W):

2 Bedroom Properties: Average Property Value: £1,702,625 - Average Rental Value: £5,300 (pcm) – Predicted Rental Yield = 3.73% - Typical Capital Growth and Value Changes over the last year (August 2015 – 2016) = -£13,625 (-0.8%)
3 Bedroom Properties: Average Property Value: £3,007,666 - Average Rental Value: £9,300 (pcm) – Predicted Rental Yield = 3.71% - Typical Capital Growth and Value Changes over the last year (August 2015 – 2016) = -£24,033 (-0.8%)

Ebury Street (SW1W):

2 Bedroom Properties: Average Property Value: £1,893,250 - Average Rental Value: £5,850 (pcm) – Predicted Rental Yield = 3.70% - Typical Capital Growth and Value Changes over the last year (August 2015 – 2016) = -£15,146 (-0.8%)
3 Bedroom Properties: Average Property Value: £2,896,166 - Average Rental Value: £8,950 (pcm) – Predicted Rental Yield = 3.70% - Typical Capital Growth and Value Changes over the last year (August 2015 – 2016) = -£23,189 (-0.8%)

Bourne Street (SW1W):

2 Bedroom Properties: Average Property Value: £2,021,709 - Average Rental Value: £6,350 (pcm) – Predicted Rental Yield = 3.76% - Typical Capital Growth and Value Changes over the last year (August 2015 – 2016) = -£16,173 (-0.8%)
3 Bedroom Properties: Average Property Value: £3,072,155 - Average Rental Value: £9,450 (pcm) – Predicted Rental Yield = 3.71% - Typical Capital Growth and Value Changes over the last year (August 2015 – 2016) = -£24,577 (-0.8%)

Judging from our results, we can immediately notice that Marylebone and its rival Belgravia offer some very differing investment strengths, which are not only very apparent with the representative streets, but these portray trends which are evident across the entirety of both property markets. Firstly, we can clearly perceive that property prices in the Belgravia district are considerably higher than that of Marylebone`s, with 2 bedroom properties arriving in the region of £1,872,528 on average, in comparison to Marylebone`s £1,700,593. This disparity in price is even more noticeable with Belgravia`s 3 bedroom properties reaching an average of £2,991,995, whereas Marylebone`s properties of the same type stand at a much more reduced price of £2,350,925. Whilst we can clearly witness a significant cost-effective property trend being settled in Marylebone`s favour, the rental capacities that residences in Belgravia possess certainly shine through. To explain, 2 bedroom properties within Belgravia expect to rake in £5,833 (pcm) on average - and anticipate rental yields estimating to 3.73% annually, whilst our selected 2 bedroom Marylebone homes achieve much lower incomes averaging to £4,483 (pcm), and have more modest rental yield forecasts of around 3.15%. As for 3 bedroom properties, this trend continues with Belgravia homes demonstrating huge rental values circling £9,233 (pcm) - portraying rental yields amounting to 3.70%, whereas 3 bedroom properties in Marylebone register a typical rental worth of £6,000 (pcm) - with rental yields calculating to a significantly lower 3.06% per year. Lastly but perhaps most interestingly, if we view the capital growth and value changes concerning properties within Belgravia, we are actually drawn towards a negative outcome, with 2 and 3 bedroom properties decreasing by 0.8% since August 2015 - reductions in the region of £14,981 for 2 bedroom accommodations and £23,933 for 3 bedroom property types. In contrast, Marylebone`s property growth is in a very healthy state, where properties have increased in general by 9.9% since last August; 2 bedroom homes have risen in value by £168,398 on average, and 3 bedroom abodes have seen even higher increases approximating to a whopping £232,747. Thus, although the rental figures in Belgravia are very impressive, and certainly interesting deals could present themselves here, Marylebone`s investment prospects are currently much more promising, with amazing capital growth increases which are expected to steadily continue, and a much more cost-effective market being displayed in overall.

If you would like to inspect the investment potential of either the Marylebone or Belgravia areas in further depth, or would like to undertake a more personal comparison between the sites specific to your own personal circumstances, please get in touch with me. There are many investment opportunities available in both these perimeters, with a wide range of property types to choose from; together let`s see which area is better suited to you!